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I think I know the answer to this but I wanted to double check... when applying for a mortgage and self employed the lender will want to see tax transcripts from the last 2 years of returns, correct? Or is a copy of the return from our CPA all that is needed?
Pretty sure they pull transcripts for everybody, not just self-employed.
The last two years of your tax returns will be required along with signing a 4506 form that gives the mortgage company or lender the authority to retrieve your filed tax return statements from the IRS. Additionally, they will likely require bank statements and pay statements for the last few months substantiating your income.
What do you mean by pay statements? I sell online so I receive all of my payments by either Paypal or through direct deposit from the website I sell on.
@Anonymous wrote:What do you mean by pay statements? I sell online so I receive all of my payments by either Paypal or through direct deposit from the website I sell on.
I was asked to provide my last two months of bank statements, 401k, IRA account, brokerage statements along with my W2 for 2014 & 2015 and my last two pay stubs.
if you haven't filed for 2015 already then you will probably need a year to date profit and loss statement for 2015.
Your PayPal payments along with corresponding deposits on your bank statements will likely be sufficient. One thing to be cautious of is the amount of write offs/deductions/losses you claimed when filing your taxes. While deductions may lessen your tax burden, they can reduce your actual income to a point that concerns a lender.
@CWESTL wrote:Your PayPal payments along with corresponding deposits on your bank statements will likely be sufficient. One thing to be cautious of is the amount of write offs/deductions/losses you claimed when filing your taxes. While deductions may lessen your tax burden, they can reduce your actual income to a point that concerns a lender.
I am taking this to heart. While I can claim more, I am just doing the basics. This will be my first tax return. Note, discrepancies between income for tax years can make them rethink the income (if it is all you have, I have other predominant income). You can add back to your income straight line depreciation items (computer, office equipment, etc.). You may also have a home deduction for either current address or new address. You can write that in as percentage deduction for mortgage, taxes, insurance for income purposes (since your income is increased by deducting that amount). Tidbits I found out yesterday.